EXERCISE 9-16 Flexible Budgets in a Cost Center LO9-1, LO9-2 Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Direct labor.. Indirect labor Utilities Cost Formulas $15.80q $8,200 + $1.60q $6,400 + $0.80q Supplies $1,100+$0.40q Equipment depreciation.. $23,000+ $3.70q Factory rent $8,400 Property taxes $2,100 Factory administration $11,700+ $1.90q Flexible Budgets, Standard Costs, and Variance Analysis The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below: Required: Direct labor... Indirect labor Actual Cost Incurred in March $134,730 $19,860 Utilities $14,570 Supplies $4,980 Equipment depreciation.. $54,080 Factory rent $8,700 Property taxes $2,100 Factory administration $26,470 1. Using Exhibit 9-2 as your guide, prepare the Production Department's planning budget for the month. 2. Using Exhibit 9-5 as your guide, prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items.(Hint: Refer to Exhibit 9-6.)